In order to avoid bank closures when receiving a fund transfer from Iran, one of the most important things to keep in mind is that the recipient of the funds must notify the appropriate department within their U.S. bank regarding the incoming wire. This is because Iran and the U.S. do not have a direct banking relationship. One cannot directly wire money from an Iranian bank to a U.S. bank or vice versa. Funds coming from Iran must be sent through a currency exchange broker. When using the services of a money exchange broker, one is selling Iranian currency (rials/toman) to the broker in Iran and purchasing U.S. dollars to be delivered to the United States. Currency exchange brokers, in turn, wire the funds to the United States via a third-country bank, as is permitted under the current U.S. sanctions regulations. Some brokers have agents or individual customers inside the United States who deposit the funds into the recipient’s account in smaller increments via domestic wire transfers, over-the-counter deposits, cash deposits, and money orders. Many individuals are not aware that this latter way of depositing funds from inside the U.S. is not legal and is often linked to money laundering and bank fraud.
However, even when receiving funds via the third-country route, which is permitted under the current regulations, the main issue that arises is that the funds are ultimately sent from a third-country bank and a bank account that is not associated with the recipient's account. In the eyes of the U.S. bank, it appears that their customer is receiving a random wire transfer from a random account, and the source of funds is unclear. As a result, the bank will flag that wire for suspicious activity, which can lead to an account being restricted, blocked, or closed. In order to avoid this, the customer should submit the appropriate compliance documents outlining the source and legality of the funds to the appropriate department of their bank.
Therefore, for generally licensed activities, the recipient must submit compliance documents to their bank for each incoming wire so that the bank is aware of the source of the funds and their legality under the current U.S. sanctions and banking regulations. Similarly, if the client obtains a specific license for a transaction, they must submit a copy of that specific license to their bank and also make sure that the sending party references the license number on the transfer so that, once again, the bank is aware of the source and legality of the transfer. A lot of bank account closures result from the fact that an individual receives funds from Iran that are legal under current general licenses but does not notify their bank of the incoming wire. From the bank side, all they see is an incoming transaction from an account in a third country that has nothing to do with the recipient's account; therefore, they flag that and ask for more information or deem it a high-risk transaction resulting in bank account closures.
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